Banks' rejection of debt recast turns into a deathblow for SREI

The SREI Group firms' business has been badly hit due to Covid; SREI mulls legal recourse over RBI's decision to supersede Group firms' boards

On Monday, the Reserve Bank of India (RBI) decided to supersede the board Srei Infrastructure Finance Limited (SIFL) and Srei Equipment Finance Limited (SEFL) – both are non-banking finance companies engaged in financing to the infrastructure sector, due to governance concerns and defaults in meeting their payment obligations. This marks the end of a prolonged period of negotiations between the Srei management and the banks during which the former failed to impress the banks for a debt recast. SEFL is a wholly-owned subsidiary of SIFL.

SREI has a total outstanding debt of Rs 30,000 crore of which Rs 18,000 crore